TD Ameritrade's CIO explains his approach to integrating technology operations after an acquisitionand that includes keeping your employees in the loop.

NAPA, Calif.  Jerry Bartlett, chief information officer of online brokerage TD Ameritrade, has some advice for technology managers tasked with integrating technology during a merger or acquisition: Don't overlook your employees during tenuous times, and make sure you show them "the love."

Bartlett, who spoke Tuesday at Ziff Davis Media's CIO Summit to an audience of about 130 at the Silverado Resort in Napa, Calif., knows a thing or two about merging technology operations. Since he joined Ameritrade in 1999, the company has acquired seven companies, including TD Waterhouse in a $2.9 billion deal that closed in January.

"How you treat people in your organization makes a huge difference. Manage with respect," he advised attendees. "You have to show the love. And you have to show it often."

Another conference speaker, David Thompson, chief information officer of Symantec, concurred. Thompson should know: He has been involved in many acquisitions, including those during his stints at PeopleSoft and then Oracle. He's now working on integrating technology operations after Symantec's acquisition of Veritas Software.

For the first 100 days of an acquisition, Thompson offered the following advice: "You are not going to get full integration on days 1 to 100. But you should do the things that keep your employees most productive, keep your product and support running." That includes integrating processes that customers would notice, such as changing invoices and customer service telephone lines.

Bartlett, meanwhile, was surprised how employees responded to the TD Waterhouse acquisition.

Some employees of TD Waterhouse, based in Jersey City, N.J., were concerned not only about the security of their jobs; some also fretted over the political views of J. Peter Ricketts, a Republican running for a U.S. Senate seat from Nebraska, who was a former Ameritrade chief operating officer and the son of Ameritrade chairman J. Joe Ricketts.

At least 20 employees said they didn't know if they could work at a company "associated with a guy who is anti-abortion," Bartlett recalled. "As a CIO, I have never quite faced that problem before. You cannot underestimate what's going through people's minds."

A case in point: One of Ameritrade's top software developers turned in his resignation before the merger took effect. Bartlett asked what prompted his decision, and the developer said he had gone through an acquisition earlier in his career and didn't want to go through that gut-wrenching experience again.

On the spot, Bartlett made him a promise: "You have a job as long as I have a job." The developer subsequently rescinded his resignation.

Bartlett's advice to technology managers: treat people fairly, and realize that you cannot engage in too much communication with employees. "If people are going to be laid off, you have to acknowledge that up front," he said.

Bartlett suggested that if employees of the merged entity don't buy into the company's vision and strategy, it's best that they leave on their own instead of staying on as disgruntled employees who are likely to be fired at a later date.

He also recommended keeping a mix of senior and junior employees after a merger. When Ameritrade acquired Datek in 2002, it kept senior employees on staff. "We ended up with folks, after six months, who were bored out of their minds." he said. "Some work requires big brains. And some work needs to get done, and your big brains are willing to do it, but not willing to do it for very long."

In addition to integrating the technology operations, Bartlett cited another challenge: focusing on the company's key goal of aggressively running and growing the business. "Over 90% of post-merger integrations fail to meet every stakeholder's expectations. They forget their commitments to their current customers," he said, adding that TD Ameritrade aims to avoid having more than 5% customer attrition while merging operations.

Thompson added that technology managers should know what their starting-point costs are and then track cost reductions during integration: "That's a common mistake CIOs makenot tracking the savings."

Executive Editoravirzi@ziffdavisenterprise.comAnna Maria was assistant managing editor Forbes.com. She held the posts of news editor and executive editor at Internet World magazine and was city editor and Washington correspondent for the Connecticut Post, a daily newspaper in Bridgeport. Anna Maria has a B.A. from the University of Rhode Island.

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